January is what I like to call the month of Money Mind! Money seems to be preoccupying our thoughts and although some of our money associations are negative (that dreaded December credit card statement and the start of tax season), it’s also a time for new beginnings. Here are 10 financial resolutions that will help you save more, spend less, and give you financial peace of mind in 2016.
Pair your financial resolutions with one of these financial apps to keep you on track — while you’re at it, check out the dozens of other apps in our list that can make your New Year’s resolution a piece of cake!
1. One-time budgeting
So maybe the monthly budget thing hasn’t worked for you in the past. At the very least, do a beginning of the year budget check-in. Analyze your 2015 spending, list out all of your current expenses, and how much you typically spend per month on each.
Now assign the amount you’d actually like to spend on each category. This activity can get you more mindful of spending and saving even if you don’t continue to track your spending throughout the year.
If you’re new to budgeting or just not sure about a few details, check out our budgeting guide for helpful tips and strategies.
2. Automate money to savings
After you’ve budgeted, you should have a better idea of how much you can save each month. The key is saving as soon as you’re paid and then working with what’s left.
Designate an amount of your paycheck to go to savings each month. Try to up contributions by at least one percent if you already have automated savings.
3. Check your credit report
You’re entitled to three free credit reports each year — one from each of the credit reporting agencies. The free report won’t list your score, but it’s important to regularly review the information for accuracy and to dispute any errors.
If it’s been a while since you checked, you may want to get all three reports. Otherwise, it could make sense to spread them throughout the year. Mark every four months on your calendar as a time to check your report.
If you’re not sure where to find a truly free report, check out Jeanette’s video guide on how to access your free credit report.
4. Brush up on your bills
When it comes to bill pay, many of us are on auto-pilot. Analyze bills line by line to see what you’re actually paying for.
For example, cellphone carriers often change their pricing but it doesn’t automatically apply to your bill. You could get more data for less or a discount when you continue to use an old phone after your two-year contract is up.
You can also call cable or cellphone companies and ask for loyalty discounts. Be prepared to negotiate and cite competing offers.
It may be time to call it quits with your cable company. Instead, try some of these free or insanely cheap ways to watch cable TV online!
5. Maximize employer 401(k) match programs
Make this the year you fully take advantage of any 401(k) match program offered by your employer. If you don’t meet the maximum contribution, you’re basically saying no to free money.
Find out how much your employer will match (for example, 50 percent of your contribution on up to 6 percent of your salary) and adjust your contributions to meet that amount.
6. Top off your IRA
Even though 2015 is over, it’s not too late to meet the contribution limit on your IRA which is $5,500, or $6,500 for people ages 50 and older. You have until Tax Day (April 18 this year) to make 2015 contributions. Use an IRA calculator to see just how much that $5,550 could be by retirement.
7. Make an extra mortgage payment
One extra payment each year could save thousands of dollars in interest and take several years off the life of your loan. Before you do, though, confirm that extra payments go toward the principal and won’t incur any fees or penalties.
It may be hard to do it all at once. Instead, you can add one-twelfth of a payment to each month. If that’s too much extra, round up your payments. It won’t add up to an extra payment but every dollar counts.
8. Make a tax prep checklist
The IRS starts accepting returns later this month, which means it’s time to start gathering the documents you will need to file.
Set a personal tax deadline for yourself way ahead of the IRS deadline. Schedule time in your calendar to work on taxes. Spread it out a little each week or devote a day to tax prep.
Once you get your tax refund, put it to good use with these smart reinvestments that will end up saving you more money in the long run.
9. Assess your credit cards
Consider switching to a rewards card. If you already have one or want to stick to your current cards, it may be time to ask for a credit limit increase. This is not so you have more money to spend, but to improve your credit utilization, which affects your credit score.
You can also ask for a lower interest rate. Most of us don’t bother to ask, but the majority of people who do get it lowered. Be aware that changes to your credit card could incur a hard credit inquiry, which could affect your credit score.
10. Search for unclaimed funds
Wouldn’t it be great to start the year off with a little extra cash in your pocket? The government may be holding on to some of your money. These are unclaimed funds like a dormant checking account or customer overpayment.
They’re turned over to the state until you claim them. Visit the National Association of Unclaimed Property Administrators to start your search.